AEP: The future for coal power is ‘very limited’

In 2005, coal made up 70 percent of AEP’s generation capacity — which is how the utility measures its electricity mix today. Since then, coal’s share of capacity has dropped to 47 percent. At the same time, AEP’s natural gas capacity increased from 19 percent in 2005 to 27 percent today, and renewables entered the scene in a meaningful way, growing from 4 percent in 2005 to 13 percent today.

Renewable energy is now slated to make up the vast majority of AEP’s planned generation additions over the next decade. In AEP’s third-quarter 2017 earnings report, the utility said it plans to add another 8,360 megawatts of wind and solar through 2030 across its regulated and deregulated businesses — and that doesn’t even include the 2,000-megawatt Wind Catcher project, which could become the largest wind project in North America.

AEP currently operates more than 224,000 miles of distribution lines in 11 states that deliver power to nearly 5.4 million regulated customers. It has approximately 33 gigawatts of generating capacity, 4.2 gigawatts of which is renewable energy.

AEP was also the first utility to test a sodium sulfur battery at utility-scale in the mid-2000s. More recently the utility has tested community energy storage pilots in Ohio and invested $5 million in energy storage software provider Greensmith.

Last week, AEP announced it plans to boost its renewable energy investments to $1.8 billion over the next three years, $1.3 billion of which will be for competitive, contracted renewable projects. The remaining $500 million will be invested in renewable energy projects in regulated states. These planned investments do not include the $4.5 billion Wind Catcher project in Oklahoma, which is subject to regulatory approvals in 2018.

Overall, AEP plans to invest $18.2 billion in capital from 2018 through 2020, with 72 percent of that focused on its transmission and distribution operations.

In many ways, AEP’s energy transformation is precisely what the Trump administration and many of its pro-coal supporters are worried about. Seeing a coal-heavy utility like AEP embrace renewables is a definitive sign that this technology has reached the mainstream.

Now, AEP finds itself pushing back against Trump’s Department of Energy over its notice of proposed rulemaking that seeks to prop up coal and nuclear. AEP has filed in opposition to the NOPR, but is open to having a more nuanced discussion on how to ensure grid resilience and reliability.

Technology developments are what turned AEP from a utility hooked on coal to a utility looking to build the largest wind farm outside Europe. Today, while AEP continues to hold a coal-heavy portfolio, the utility even finds itself labeled the renewable energy advocate in certain discussions with fossil fuel interests.